Loads of Web 2.0 stuff is lots of fun, here are a list of some of the very interesting and useful ones I have found, and will add to them as I find more.

Voki voki allows you to create a talking animation. This can be added to your blog, wiki, sent via phone etc. You can record your own voice or if you hate the sound of your voice you can type in what you want to say and generate a different voice.
This is a really easy to use application, and the kids love individualising it.